The Elite Squad 2 plot resolves around the maturing Lt Col. Nascimento, who, after a disastrous BOPE operation on a prison riot, gets caught in a bloody political dispute that involves not only the Public Safety Department, the State governor and State Military Police, but also paramilitary groups known as milícias. The movie also shows the family issues of Nascimento, with his now adolescent son gradually moving away from him due to his job and the influence of his stepfather.

The story is set 13 years after the first movie. Elite Squad 2focuses more on Nascimento's family relations than Squad 1. In Wagner Moura's words: "Nascimento matures in this movie, which has to do with his concept of conscience and his age.